Sept. 10, 2000 - With Friday's favorable recommendation from the Justice Department's antitrust division, Denver's two major daily newspapers are speeding to one of the fastest approvals ever of a joint operating agreement since a 1970 federal law made the pacts legal.

WHAT IT MEANS

It has been one of the nation's toughest and most colorful newspaper battles. Here's a look at some of the changes a proposed joint operating agreement would bring for readers of both The Denver Post and the Denver Rocky Mountain News.

The products: The newspapers would continue to publish separately.

Monday through Fridays: The Post would continue to publish in its traditional broadsheet format and the News as a tabloid.

On Saturday: The News would publish a broadsheet edition with some opinion-page content from The Post under a joint nameplate.

On Sunday: The Post would publish a broadsheet edition with some opinion-page content from the News under a joint nameplate.

Business operations: Circulation, advertising, production, administration and other functions would be combined under a new company called the Denver Newspaper Agency Inc.

Newspaper prices: Would most likely stay at 25 cents daily, according to William Dean Singleton, who would be chairman of the agency board for the first four years. Sunday prices would rise.

Advertising prices are expected to rise

Workers: No layoffs are expected, although there may be some job losses due to attrition or buyouts. In July, unions representing 2,600 Denver newspaper employees reached a seven-year labor agreement and agreed to back the proposed JOA.

When would the JOA happen? A report from the Justice Department's anti-trust division recommending approval of the JOA should be made public early next week.

After that, there is a 30-day period for public comment. Then, Attorney General Janet Reno could rule any time. If she approves the agreement, it would become effective 10 days later, allowing the companies to begin combining operations. Post publisher Gerald E. Grilly said Friday that he expects the weekend editions to be combined after the first of the year.

Just four months after the owners of The Denver Post and Denver Rocky Mountain News applied for an antitrust exemption to merge their business operations, federal attorneys recommended that Attorney General Janet Reno approve the pact, known as a JOA, without public hearings.

Compared to other big-city JOAs, Denver's has galloped along with minimal opposition from the typical sources: politicians, unions, advertisers and competitors. And, the application is the first of the Internet Age, when online news, proliferating cable channels and suburban newspapers make it harder than ever for two independent newspapers to survive in one market.

The JOA is designed to preserve a newspaper that might otherwise fail, maintaining two editorial voices in the community.

"The market for journalism is changing, and there are alternate means exerting competitive pressures that weren't present in the 1980s," said Phil Weiser, an associate professor of law at the University of Colorado.

"This is the first JOA in the Internet Age. It was treated, I think, more leniently than the others. Part of it has to be that the competitive landscape has changed. If there are no consumers who are vocally upset about the transaction, that suggests that the transaction is OK."

No JOA has ever been denied, and legal experts expect Reno to approve the recommendation, perhaps before or shortly after the November election. But they also hold the door open a crack for a wave of opposition to surface and delay a decision.

So far, however, the silence among opponents has been almost deafening, speaking volumes about the likelihood of potential roadblocks ahead.

Weiser has an interesting perspective on the antitrust division's task. From 1996-98, he was senior counsel to Joel Klein, head of the division. Weiser expects Reno to approve the JOA, perhaps within weeks after a 30-day public comment period ends. The comment period could begin as soon as Monday, when owners of the News and The Post will petition to have the antitrust report made public.

"There's no way she lets this thing go until January. At this point, there is almost no conceivable way that this gets politicized,"

Weiser said. "It's not fair to the parties to hold this thing out unless you have a really good reason. She's someone who is sensitive to that." Subscription and advertising discounts, combined with rising newsprint prices, marked the latter stages of the 108-year-old war between the News and The Post - prompting their owners to seek a JOA.

News owner E.W. Scripps Co. reported that the paper lost $123 million over the past decade. Post owner MediaNews Group said it has been profitable, but those margins are getting slimmer.

The companies want to merge business operations such as advertising and circulation, while maintaining separate newsrooms and producing competing publications. The News will print Monday through Saturday; The Post will print Sunday through Friday.

If observers' predictions come true, the Denver JOA could be approved by mid-October or early November - or within six months of its announcement. The first JOA after the 1970 Newspaper Preservation Act won approval after four or five months, said Kay Fanning, former owner of the Anchorage Daily News. A JOA in Chattanooga, Tenn., was approved in eight months. Las Vegas gained approval in 1990, 10 months after the application. The York, Pa., JOA took just under a year.

More unusual is that MediaNews and Scripps apparently will escape public hearings that stalled JOAs for years in cities such as Seattle, Detroit and Cincinnati.

"This is the first major city in which the antitrust division has recommended approval" without hearings, said John Morton, a newspaper industry analyst in Silver Spring, Md. "It tells us the antitrust division recognizes the newspaper business is different than it used to be, that there's competition that wasn't there five years ago and especially 10 years ago."

Scripps and MediaNews had more than newspaper economics on their side. They greased the skids by gaining support from organized labor. Union opposition snagged a 1986 JOA application by Detroit's two dailies for 3 years.

In July, unions representing 2,600 workers at the two Denver papers reached seven-year labor agreements that call for two consecutive 3 percent annual wage increases beginning one year after the JOA is formed and for a twoyear ban on layoffs.

"The unions did file letters (with the Department of Justice) asking for approval. The assistant attorney general's recommendation is in line with what we requested,"

said Tony Mulligan, administrative officer of the Denver Newspaper Guild and president of the Denver Council of Newspaper Unions. "I don't anticipate the union at this point putting an additional comment in during the 30-day period." Also absent from the naysayers are the state's two most prominent politicians: Gov. Bill Owens and Denver Mayor Wellington Webb. In Detroit, former Mayor Coleman Young was a major critic of the pact between The Detroit News and Detroit Free Press, and he was among those in 1986 who called for Justice Department hearings on the application. Young reluctantly withdrew his opposition nearly two years later, after Free Press owner Knight Ridder Inc. said it would close its paper without a JOA.

Owens, briefed on the JOA plan shortly before the May 11 announcement, said at the time that the proposal "will help ensure that this proud Colorado journalistic tradition with the Denver Rocky Mountain News and The Denver Post will continue for at least the next 50 years," the term of the JOA.

In May, Webb said he was surprised, but relieved, by the proposed pact.

"Most of the people in Denver who have followed the competition between the two newspapers have always wondered when it would get to the point of being a one-newspaper town," Webb said then.

"I think a joint operating agreement is a real asset to the community because it allows us to continue to have two newspapers with two newspaper staffs."

Advertisers, competitors and readers have, however, criticized the Denver JOA, complaining of potential increases in advertising and subscription rates. They also worried, in filings with the Justice Department, that the quality of the papers and their competitive spirit might deteriorate.

American Furniture Warehouse president Jake Jabs requested that the Denver JOA be denied, saying he feared advertising rates would quadruple.

Jeffco Publishing, which publishes the Arvada Sentinel, Golden Transcript, Lakewood Sentinel and Wheat Ridge Transcript, requested hearings on the JOA, arguing that the dailies might raise subscription and advertising prices in Denver, but sell below-cost in the suburbs. The company also questioned whether the dailies might start weekly sections there.

In a letter to the Justice Department, Patricia Calhoun, editor of the Denver weekly Westword, warned of increased ad and subscription rates, and questioned whether the JOA would jeopardize the printing of her publication, which is printed by the News.

But Calhoun said she was told by the Justice Department that those issues went beyond the scope of the Newspaper Preservation Act.

"I think the Rocky Mountain News financials made a fairly compelling case that, if not for a JOA, Scripps would pull the plug," said Calhoun, adding that Friday's recommendation did not surprise her.

"In the Newspaper Preservation Act, they are looking at whether a JOA will save a failing newspaper and preserve an independent voice. Chances are that one of the papers, probably the News, would disappear."

Denver Post staff writers David Migoya and Mike Soraghan contributed to this report.

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